English
Market News International gold prices struggle to rise, the US dollar urgently needs the Fed to show its direction
International gold prices struggle to rise, the US dollar urgently needs the Fed to show its direction
On September 3, international gold prices rose, but the U.S. index is expected to stop the decline, which limits the upside of gold prices. Investors are waiting for U.S. non-agricultural employment data to study and judge the Fed’s plan to reduce asset purchases. As the financial market is waiting for the Fed to provide a clearer path, the current direction of the US dollar is unclear, and analysts are divided on the US dollar's expectations for the next three months.
2021-09-03
10072
On Friday (September 3), international gold prices rose, but the U.S. index is expected to stop the decline, which limits the upside of gold prices. Investors are waiting for U.S. non-agricultural employment data to study and judge the Fed’s plan to reduce asset purchases.
At GMT+8 16:03, spot gold rose 0.13% to 1812.13 US dollars per ounce; the main COMEX gold contract rose 0.14% to 1814.1 US dollars per ounce; the dollar index 0.02% to 92.196.
The U.S. dollar index hit a new low of 92.151 since August 5, or a weekly decline for the second consecutive week.
Stephen Innes, managing partner of SPI Asset Management, said: “We see that those who might bet on non-agricultural employment data are pre-positioning on a small scale. If the data is weak, it may be quite beneficial to the price of gold because of this. It will strengthen (Fed Chairman) Powell’s more cautious view on the outlook for the US economy... If the data is strong, we may see the price of gold drop below the $1,800 mark."
The US Department of Labor will release its August non-agricultural employment report at 20:30 on Friday, GMT+8. Data released before this show that the number of initial jobless claims in the United States fell last week, and the number of layoffs in August fell to its lowest level in 24 years.
Fed Chairman Powell said last week that if employment continues to grow, policymakers may begin to reduce the scale of asset purchases this year, but they will remain cautious when deciding to raise interest rates. Although gold is seen as a hedge against inflation and currency depreciation, low interest rates also reduce the opportunity cost of holding gold as a non-yielding asset.
The survey shows that the current direction of the US dollar is unclear as the financial market is waiting for the Fed to provide a clearer path. Although analysts expect the U.S. dollar to give up most of its gains in the next year, their expectations for the U.S. dollar in the next three months are divided.
Kerry Craig, global market strategist at JP Morgan Asset Management, said: “When we look at the dollar’s movements, we see two important forces. One is the global recovery and the momentum we have seen recently, and the second is clearly the response of central banks to this, because These two forces are currently competing with each other, so our view of the direction of the dollar is relatively neutral."
David Adams, head of foreign exchange strategy for North America at Morgan Stanley, said: "Ultimately, we believe that in the next few months the real yield will continue to rise, this is likely to be beneficial to the US dollar. We continue to be bullish on the US dollar, especially relative to the low Yen and Euro exchange rates for earnings."
Jane Foley, head of foreign exchange strategy at Rabobank in London, said: "When risk appetite prevails, the U.S. dollar tends to weaken and funds flow into emerging markets. What we have seen recently is that the Delta variant virus is truly shaking up Asian markets. At the same time, the discussion around the reduction of stimulus magnifies the degree of this uncertainty. It is the combination of these two factors that makes the funds flow back to the US dollar. In order for the US dollar to weaken again, we must have a large amount of funds flow into emerging markets. I don’t think this will happen right away."
At GMT+8 16:03, spot gold rose 0.13% to 1812.13 US dollars per ounce; the main COMEX gold contract rose 0.14% to 1814.1 US dollars per ounce; the dollar index 0.02% to 92.196.
The U.S. dollar index hit a new low of 92.151 since August 5, or a weekly decline for the second consecutive week.
Stephen Innes, managing partner of SPI Asset Management, said: “We see that those who might bet on non-agricultural employment data are pre-positioning on a small scale. If the data is weak, it may be quite beneficial to the price of gold because of this. It will strengthen (Fed Chairman) Powell’s more cautious view on the outlook for the US economy... If the data is strong, we may see the price of gold drop below the $1,800 mark."
The US Department of Labor will release its August non-agricultural employment report at 20:30 on Friday, GMT+8. Data released before this show that the number of initial jobless claims in the United States fell last week, and the number of layoffs in August fell to its lowest level in 24 years.
Fed Chairman Powell said last week that if employment continues to grow, policymakers may begin to reduce the scale of asset purchases this year, but they will remain cautious when deciding to raise interest rates. Although gold is seen as a hedge against inflation and currency depreciation, low interest rates also reduce the opportunity cost of holding gold as a non-yielding asset.
The survey shows that the current direction of the US dollar is unclear as the financial market is waiting for the Fed to provide a clearer path. Although analysts expect the U.S. dollar to give up most of its gains in the next year, their expectations for the U.S. dollar in the next three months are divided.
Kerry Craig, global market strategist at JP Morgan Asset Management, said: “When we look at the dollar’s movements, we see two important forces. One is the global recovery and the momentum we have seen recently, and the second is clearly the response of central banks to this, because These two forces are currently competing with each other, so our view of the direction of the dollar is relatively neutral."
David Adams, head of foreign exchange strategy for North America at Morgan Stanley, said: "Ultimately, we believe that in the next few months the real yield will continue to rise, this is likely to be beneficial to the US dollar. We continue to be bullish on the US dollar, especially relative to the low Yen and Euro exchange rates for earnings."
Jane Foley, head of foreign exchange strategy at Rabobank in London, said: "When risk appetite prevails, the U.S. dollar tends to weaken and funds flow into emerging markets. What we have seen recently is that the Delta variant virus is truly shaking up Asian markets. At the same time, the discussion around the reduction of stimulus magnifies the degree of this uncertainty. It is the combination of these two factors that makes the funds flow back to the US dollar. In order for the US dollar to weaken again, we must have a large amount of funds flow into emerging markets. I don’t think this will happen right away."
Bonus rebate to help investors grow in the trading world!
Or try Free Demo Trading
